Nel's New Day

February 18, 2014

Stop Cable Monopolies; Keep Net-Neutrality

Once upon a time, having television transmission meant having three networks—sometimes four—that appeared on a small screen because of two pieces of metal, or “rabbit ears,” sticking up from the TV. Some people got the image through an artistic metal sculpture on the roof. No matter what, it was free for viewers. In 1976, however, Ted Turner figured out how to make money through his own network, and since then, the number of these has geometrically expanded. Now almost everyone with television pays cable providers for networks chosen by these providers.

Although the United States outlaws corporate monopolies and mergers that block competition, cable providers have that monopoly. Almost all rural areas have no choice of provider; people who want television take whatever is offered.

The largest provider and majority owner of NBC and MSNBC, is Comcast. It’s also the largest media company in the world. In 2013, it took in $64.67 billion, generating $13.6 billion in operating income and $7.1 billion in net profits. Comcast is about to get much larger by buying the second biggest provider, Time Warner Cable, for $45 billion. Millions of people in the United States buy access to the World Wide Web through these two companies, about to become just one.

As Thom Hartmann commented, regarding the proposed merger and last month’s court decision striking down net-neutrality rules, “American consumers could get screwed.”

To keep companies like Comcast and Time Warner from slowing or charging for access to specific websites, the FCC tried to establish “net-neutrality” rules. Without these rules, basic internet service could be $29.95 per month, but accessing any websites would cost more by “packaging” websites just like cable providers do with TV channels.

cost net neutrality

A merger of Comcast and Time Warner would negatively impact service and cost for not only television and the internet but also telephones. The corporations’ bandwidth is already better than the phone company DSL lines except where other providers have installed fiber lines, a process that has come to a halt. Om Malik, founder of the GigaOm technology news company, wrote that cable consolidation in this century “is all about broadband,” which has high profit margins and doesn’t have to deal with Hollywood.

The primary advantage of a monopoly is to “drive up costs and reduce choices for consumers,” which is what Jodie Griffin, senior staff attorney of consumer rights group Public Knowledge, said Comcast will most likely do. She added that the power of the new company would make it a “gatekeeper” capable of “throttling competition.”

When Comcast took over NBC Universal in 2011, it promised a commitment to net neutrality, at least until the end of 2017. Yet it began to slow the speed of Universal’s competitor Netflix below speeds on other internet service providers. Comcast also refused to put Bloomberg Television with its own finance channel CNBC in its cable lineup.

Competition is supposed to bring prices down. The bundling “triple-play” plan of telephone, internet, and telephone starts at $30 dollars per month in Switzerland. Unlimited broadband in Britain starts at $25 per month. For televisions built since 2008, a digital television service called Freeview that provides more than sixty television channels, about thirty radio channels, and about a dozen streaming Internet channels is just that—free to view.

A few facts about Comcast which is the “worst company” list with Time Warner:

  • Comcast overpromises while it underdelivers, yet CEO Brian Roberts blames the customers for complaining.
  • Business media like the fact that Comcast is a monopoly. Forbes praised the company for succeeding “by providing less customer service.”
  • Comcast’s predatory pricing will most likely become worse. The company’s monthly costs is already four times more than companies in Europe before it announced a $1.50 “broadcast TV fee” this year. Because Comcast owns NBC, the company can charge double for its content, such as the coverage of the Olympics. The fee will provide viewers more commercials, especially during reruns of old TV series.
  • Comcast has a well-known contempt for customers. For example, the company has earned additional billions because it disables fast-forwarding through commercials and refuses Netflix access to the best-quality video streaming.
  • Comcast is planning “capped broadband,” charging people by how much data goes into their homes. This allows them to raise prices in “uncompetitive” rural media markets.
  • Comcast blames its users for predatory pricing by saying that “most people” don’t use that much data. The company claims that sneaking in usage caps is the “fairest” way to ensure that data hogs don’t use up all the internet.
  • Comcast falsely claims that people in the United States don’t want faster broadband. The far cheaper European monthly packages, for example France’s cost of between 20 to 40 percent cost of that in the United States, are ten times faster download and 20 times faster upload than broadband in the U.S. East Asia is also far superior to that in the U.S.
  • Comcast also claims that its customers don’t want alternatives, saying that Google’s $30 per month offer of one-gigabit per second connection on a fiber-optic line isn’t necessary. Comcast caps data which stops the speed boost that Google could offer.

The proposed merger and net neutrality means that all data—internet, television, and phone—going into the home is controlled by one company that has a history of playing favorites. The Federal Communications and the Department of Justice will make the decision, and the cable industry has far more clout than We the People. After the FCC approved Comcast’s takeover of NBC Universal, Comcast hired FCC Commissioner Meredith Baker. President Obama and Attorney General Eric Holder have also vacationed at Comcast CEO Roberts’ Martha Vineyard home.

We need to keep protesting the illegal merger in an attempt to keep the huge corporations from enriching the few at the expense of the many. Tim Fernholz is optimistic—at least this time around:

“Consider that Comcast won’t have to pay a break-up fee to Time Warner if the deal fails. It’s unusual for a deal of this magnitude to lack such insurance, which the orchestrators say is a sign of confidence. But a simpler explanation may be that they fear the deal will fail, and don’t want to be on the hook for the loss.”

We need to stop both the mergers of the monopolies and the end to net-neutrality.


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